Kiwi holds onto gains as risk appetite improves

Key Movers

The US dollar bounced off 8-week lows through trade on Wednesday, creeping higher against a basket of major counterparts and recouping some of the losses suffered in the wake of the Fed’s emergency rate adjustment. An acceleration in growth across US services and private employment data helped bolster confidence in underlying economic strength despite the impacts of the coronavirus and helped fuel an uptick in the dollar index and push back above 97. The Euro moved lower through trade on Wednesday as markets begun pricing in an imminent monetary policy adjustment. The European Central Bank is expected to follow the Federal Reserve in cutting interest rates next week, pushing the benchmark rate even further below zero. Markets are pricing in a 90% chance of a 10 basis point cut and forced the combined unit back toward 1.11.The Canadian dollar moved lower through trade on Wednesday after the Bank of Canada slashed interest rates. The monetary policy setting committee issued a 50 basis point rate adjustment in a bid to pre-empt a broader economic slowdown driven by the coronavirus, promising further rate cuts if necessary. Falling through 0.7450 the loonie touched intraday lows at 0.7446 and remains vulnerable to further adjustments in risk appetite as the global economy stalls.